Titan Pharmaceuticals (NSDQ:TTNP) said last week that it inked a $10 million venture loan and security deal with Horizon Technology Finance Corp.
The first $7 million tranche was triggered after the groups inked a deal, Titan reported, and a second option of $3 million is available to the California-based company until March 31, 2018, contingent upon certain revenue and development milestones.
According to the deal, Titan issued warrants to Horizon to buy an aggregate of 280,612 shares of common stock at $1.96 apiece. The company also issued Horizon a warrant to be exercised upon the funding of the loan’s second tranche.
“We believe this transaction balances our capital needs and opportunity to grow the company, and our commitment to minimizing dilution for shareholders to the extent possible,” Titan President and CEO Sunil Bhonsle said in prepared remarks. “We were impressed with Horizon’s ability to tailor a financing structure that matched Titan’s objectives. We expect that our existing cash on hand, combined with the net proceeds from the first tranche of this loan, will be sufficient to fund planned operations into early 2019.”
The loan agreement, which has a term of 46 months, consists of interest-only payments through the end of 2018. The initial interest rate was set at 9.63% and each loan tranche is subject to a 5% final payment when the principal is paid in full, according to the deal. The senior debt is secured by all of Titan’s assets, except for its IP, the company reported.
“We are pleased to provide this debt financing to Titan. The company’s proprietary long-term drug delivery platform, ProNeura, represents a new standard of chronic disease management utilizing subdermal implants,” Horizon president Gerald Michaud added. “We look forward to working with Titan as its lead product, Probuphine, advances in the marketplace and the company continues to develop a growing pipeline of new treatments for select therapeutic markets.”
Want to stay on top of DDBN content? Sign up for our e-mail newsletter for a weekly dose of drug-device news.